Yes, You Can Buy Your Own Comcast Set-Top Box

In “Comcast: Cable Modem Rentals Contribute More Than Olympics” I left
Comcast’s set-top box rentals out of my analysis because I didn’t think customers could buy their own set top box. In the comments, Forbes reader AJonline said this was not true and told us he purchased his equipment from HD DVR TV. Recently, another Forbes reader, Golan Yona, gave me permission to share his ultimately successful experience with you.

First, here’s the relevant portion of AJonline’s comment.

…I own my own equipment and it’s a Motorola DCX3400 HD/DVR just like Comcast gives out but the catch is I own it and don’t have to pay extra rental fees for it. I had to rent their CableCard but that is a very minimal cost compared to renting their equipment. They do disable the “OnDemand” feature but I have an Xbox so I can stream it anyways… www.hddvrtv.com is the website I purchased my equipment from and after getting bad cable-cards, bad customer support from Comcast, techs that didn’t know anything about cable-cards.. I finally got it going with their help…

Since AJonline chose to remain anonymous I hoped that others who were willing to stand behind their recommendations would step forward with other places where you can buy a set-top box.After four months, however, no alternatives have turned up, so when Golan contacted me about his experience, he had my interest.

Golan:My experience with their cable boxes was initially very bad, but after multiple phone calls and many hours (more than 10 hours, combined) on the phone with Comcast representatives I eventually got them to work.

Ken:Was the problem with hddvrtv or Comcast?

Golan:Most of the problems were with Comcast and their representatives. There are too many departments involved. Basically, Comcast doesn't make it easy to get these boxes activated.

Ken: What did it take to activate the set-top boxes?

Golan:The representatives in the Comcast store (where you get the cable-cards), give you the cards, but don't enable them (to prevent initiation of charges until you actually activate the card). However, when you call to activate them, some representatives seem to have a difficulty proceeding without the card being enabled, and need to contact billing.

The cable-card activation department of Comcast is a separate department from the 'standard' equipment activation department. So when you call to activate, you are being transferred to that other department.I talked to maybe 8 or 9 different representatives in that department, initially, with Jay [from hddvrtv] on the line as well, and on later phone calls, just myself.

Most of the Comcast representatives had very little experience with activation of cable-cards. As a result, it took about an hour to activate the first cable box and the representative who did that actually messed up as all the premium channels were missing. To solve that I had to call again, and also talk to the billing department.

Ken: So far it sounds like Comcast was the source of your activation problems?

Golan:In my case it didn't help that the second cable box I received was defective. Jay kept blaming Comcast for handing out defective cable-cards. Electronics can fail at any point (maybe mine was damaged during shipping), but he wouldn't even consider the option that the box is defective, because he tested it before shipping.

He also said that if I return the box and the box happens to be working fine, then I will be charged for shipping both-ways. So I went back three times to Comcast, every time taking a new cable-card. And every time I had to call Comcast again, and spend an hour or so on the phone, trying to activate it.

In Jay's defense I could say that Comcast is also guilty of handing defective cable-cards: At some point Jay mentioned that he advises customers who got a defective card to use a hammer and crash the card, so Comcast won't put it back in stock. Lo and behold, on one of my trips to the Comcast store, I was handed a card that was obviously crashed with a hammer... I rejected it and asked for a new card.

Ken:So Jay was right about the bad cable card?

Golan:Yes, Jay had a point. Yet, in my case it eventually turned out that the cable box and not the card was defective. After my third attempt to replace the card failed, Jay was convinced, and shipped another box, which I was able to activate. By then it was relatively smooth. I had the direct phone number to the cable-card department and after doing the same procedure again and again (and enabling the card upfront in the store, to save time), I knew the drill quite well.

Ken:So you ultimately succeeded in activating the set top boxes you bought from hddvrtv.com?

Golan:All in all - it was not an easy process. On the other hand, I was unlucky to get a defective box, and also get inexperienced Comcast representatives on the line. Jay's method to avoid them is ask in the beginning how long they have been working with cable-card activation, and if it is less than several weeks, then just hang-up and call again. Other customers might have better luck with this process.

Now I do have two cable boxes that are working. I get the premium channels (e.g. HBO), and I have the HD channels, and the DVR is working. And although Comcast is charging $1.5 per card, they give a credit for $2.5 per piece of user-supplied equipment. Not bad.

Ken:Are you satisfied with www.hddvrtv.com?

Golan: Initially I was upset by Jay’s attitude, but he apologized later.I realized he has been dealing with this nonsense every day, which explains why he is so jaded and skeptical. At the end of the day, he is with the good guys.

Two words of caution about the equipment:

1) It is old (I got the Motorola DCH6416), and I am not sure how long the hard drive will last (I assume it has been in use for years already). BTW - don't even try to activate the card that comes with the box.Just get new ones from Comcast.

2) These cable boxes do not support on-demand (for that you need two-way communication, and as far as know only Tivo supports that).So I ended keeping one of the HD-DVR boxes I got from Comcast, just so I can access the on-demand shows.

Ken:Thank you Golan.

My Take: Although FCC rules require cable operators to allow consumers to activate their own set-top boxes, it is understandable why Comcast does not want to make it easy.

Based on the number of customers Comcast reported at the end of Q3, 2014, I estimate that equipment rental fees generate about $2 billion of revenue per quarter. The equipment has a useful life of 3 to 5 years and might cost $25 to $50 in quantity so after you subtract the costs, equipment rentals contributes about $1.5 billion or roughly 50% of Comcast’s income before taxes each quarter. This is admittedly “back of the envelope” but I think we are in the right ball park.

It is a good enough estimate to understand that Comcast’s profits would take a significant hit if customers bought their own cable modems and set-top boxes instead of renting them. That’s why it could make sense for Comcast to make it as difficult as possible for customers to buy their own equipment even though customers are within their rights to do so.

If anyone else has firsthand experience purchasing a set-top box from hddvrtv.com, or anyplace else, please post a comment to this article or send a message to me.

Disclosure: I am the portfolio manager for mutual and hedge funds advised by Marketocracy Capital Management, an SEC registered investment advisor. Before relying on the opinions expressed in this article, you should assume that Marketocracy, its affiliates, clients, and I have material financial interests in these stocks and may hold or trade them contrary to these opinions when, in our view, market conditions change.

I am the CEO and founder of Marketocracy, Inc., and portfolio manager at Marketocracy Capital Management, LLC, an innovative technology based firm that maintains a database of the world’s greatest “unknown” investors. I require these “Marketocracy Masters” to outperform the ...